ActiveVideo Networks has won a deferred injunction against Verizon Communications for patent infringement and has been awarded royalty payments that could amount to $11 million a month. ActiveVideo was previously awarded nearly $140 million in damages and interest. Verizon says it is confident that the finding of patent infringement will be overturned on appeal. Meanwhile it is working with Cisco Systems on a workaround.
The injunction is effective 23 May 2012, giving Verizon six months implement a workaround solution. In the interim, from 1 December 2011 Verizon must make monthly royalty payments of $2.74 per subscriber per month. Verizon has around four million subscribers to its FiOS TV service, so that amounts to nearly $11 million a month.
The ActiveVideo CloudTV platform offers navigational mosaics, advanced advertising, apps and games to any set-top box or network connected video device or display. It is currently deployed with cable system operators including Cablevision, with which Verizon competes with its FiOS TV service.
Jeff Miller, the president and chief executive of ActiveVideo Networks said: “It is only right that Verizon, having been found to infringe our patents, should be prevented from competing with us.”
Judge Raymond Jackson concluded: “There is no doubt that ActiveVideo suffers indirect losses when Cablevision suffers direct losses from Verizon’s infringement”.
Verizon intends to appeal the decision, saying it is confident the finding of patent violation will be overturned, in the meantime it is working with Cisco Systems to implement changes that “will end any argument about the use of ActiveVideo’s patents”. The telco is separately involved in patent litigation with Cablevision, claiming some set-top boxes provided by Cisco infringe its patents.
As reported by informitv in August, a jury found that Verizon had infringed the patents owned by ActiveVideo and awarded damages totalling $115 million. The court subsequently increased the award and ordered Verizon to post a $145 million bond, pending appeal. ActiveVideo filed for an injunction calling for the company to cease and desist from further infringement of its patents.
The patents involved are: US 6,034,678 “Cable television system with remote interactive processor,” US 5,550,578 “Interactive and conventional television information system,| US 6,100,883 “Home interface controller for providing interactive cable television” and US 6,205,582 “Interactive cable television system with frame server”.
The earliest of the patents, filed in 1994, includes the term “Smart TV” and apparently claims to cover a form of remote channel selection. Patent protection generally lasts for 20 years.
ActiveVideo Networks was formerly known as ICTV and developed a system it called HeadendWare, which used centralized processors to deliver interactive television services as standard digital video streams.
ActiveVideo claims the patents are fundamental to interactive television services such as video on demand. That will be for the courts to decide, but it is still far from certain whether ActiveVideo will ultimately prevail. If so, it could arguably have implications for other video services using web technologies.